The Masters, which has been running for 36 years, will move to the Palace from Wembley Arena for the next tournament in January.
World Snooker chairman, Barry Hearn, said: "Alexandra Palace is an absolutely fantastic venue.
"When it's packed out, the atmosphere in the place is electric, and I can't wait to see snooker played under those conditions because that's what The Masters is all about."
The tournament will run from January 15 – 22, and reaches a audience of millions around the world through television coverage.
Rebecca Kane, managing director of Alexandra Palace, said: "We are so pleased that Ally Pally has been chosen as the new home for The Masters.
"We have a strong heritage in bringing live entertainment to the fans from a unique setting overlooking the whole of London."
Ticket details will be announced soon here.
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